Tax Extenders

Floor Speech

Mr. WHITEHOUSE. Madam President, I wish to say a few words about an amendment I had offered to the original tax extenders bill as No. 4324, which has also been offered as an amendment to the current package. It very much appears that in the crucible of the pressures the bill has had to go through in order to get to its present status, this amendment will not succeed.

The chairman of the Finance Committee is on the Senate floor. I thank him for his persistent efforts to try to get it into the agreed package and for his patience with my even more persistent efforts to try to get it into the agreed package.

It is a bipartisan amendment. I thank the five Republican colleagues who cosponsored it. I particularly thank Senator Sessions, who is the ranking member on the Judiciary Committee. He was an early, initial cosponsor. We introduced it together in the Judiciary Committee. It passed out of the committee uneventfully. It was a pleasure to work with Senator Sessions. I was delighted he was willing to not only support it as a bill on the Senate floor but also to cosponsor it as an amendment to this tax extenders package. I extend a particular appreciation to him and to his staff for working with us on this legislation.

Let me say briefly what it is about. If you are an American business and you are doing business in a different State, in a State in which you are incorporated and domiciled, you would ordinarily have to file an agent for service of process in that State so that if your conduct or product injures somebody in that State, service can be achieved in the place of the injury.

We have a world economy, and we are undoubtedly the world's greatest importer of goods. Some of these goods are harmful. Most of them are good for Americans, good for the economy, good for our consumers, but some are not. The wallboard that came from China filled with sulfur so that when it was installed in houses, the sulfur leached, corroded piping, made the occupants unhealthy, required a complete stripout and rebuild not only of the walls but also of plumbing and other fixtures and air-conditioning--that was a disastrous imported product.

Toys with lead that children could absorb: We all know what damage lead will do to developing brains of young children, particularly Chinese toys with lead in them. Pharmaceutical products with unacceptable chemicals added to them: There have been a lot of products that have come in from overseas and have harmed Americans.

If you are a big, legitimate foreign manufacturer, you probably have an office here. If somebody is hurt, it is not too hard for the person representing you to find the office and file suit and seek recovery for whatever injury was sustained. Many foreign manufacturers even have manufacturing facilities in this country. That makes it very easy to locate them. But some do not. Some live in a shadowy world where they send their products into the United States, get the money out, but when their defective product injures an American, trying to find them is like trying to grasp a handful of fog. They have disappeared, and they hide behind complicated international treaties and foreign laws in their home countries, making both service of process, getting the papers on the lawsuit to them, and actually getting your hands on them legally under our due process--long-arm statutes--is very challenging and difficult.

We heard from people who spent literally tens of thousands of dollars trying to have their pleadings translated into a foreign language, work their way through all the complex ministries in the foreign country, all trying to find a company that, in many cases, simply reforms itself in a new corporate form and leaves them with nothing at the end of the chase.

When that happens, it is a very unfortunate result for American people, and it is a very unfortunate result for American businesses. The unfortunate result for American people is that somebody who was injured, whose child was lead-poisoned, for instance, has no one from which to seek recovery, and they lose the opportunity we ordinarily enjoy as Americans when we are injured by a product to get compensation for the injury. It is the family who gets hurt in that circumstance. That is one way it is bad.

The other way it is bad is because commerce is often a chain. When the wrongdoing foreign manufacturer disappears, the other folks who are still in the chain are still around to be sued. Under our theory of joint and several liability, the American company has to pick up the liability for the foreign company that absconded after it created the injury.

We had a very good example in our committee of an Alabama contractor who had a very good reputation, who built developments and homes. He got caught with this Chinese drywall. There was no Chinese drywall manufacturer to sue, but both for purposes of protecting his own reputation with the people for whom he had built these houses and because the liability now fell on him as the joint and several liability party, he had to go in and clean it all up. He had to put up the people who were living in these houses. He had to rebuild their air-conditioning systems and their plumbing systems. He had to strip out all the drywall and rebuild it all back. It was an immense expense, and it fell on the American company because the Chinese company had absconded and was not amenable to service and, consequently, to our laws.

The very simple premise of this bill is, if you are a foreign manufacturer that exports goods into the United States of America, with your export has to come an agent for service of process. You have to file agent of service for process. When that Chinese drywall, when that defective pharmaceutical, when that lead-poisoned toy hits an American consumer, hits an American home, hits an American family, they can go to that agent for service of process and find the wrongdoer, and they are amenable to justice in our courts.

It is from a competitiveness point of view wrong that foreign manufacturers should be able to underprice American companies because they know they can dodge liability, dodge the consequences for their actions, and have an American company have to charge more, knowing they have to bear that liability.

Setting aside the whole public safety and consumer protection piece, it is a systemic disadvantage to American industry to not fill this loophole and make our workers' international competitors hit the same bar that American companies have to hit in terms of being available for suit when their products create an injury.

Obviously, the tax extenders legislation has not proven to be the vehicle for this legislation. My contention for my colleagues is that because this is a bipartisan bill, because Senator Sessions and I worked so hard on it, because all of the initial concerns that were raised by the U.S. Chamber of Commerce have been cleared and it is now good to go with the Chamber of Commerce--which I know has a significant voice in the views of my colleagues on the other side of the aisle--and because this is a simple mechanism that will treat foreign companies no differently than American companies are treated and put them on a level playing field and protect American jobs, as well as consumers, I look forward to continuing to pursue this legislation and look for further opportunities and further vehicles to find a way to remedy what is now an unjust situation for American consumers, an anticompetitive and unfair situation for American businesses, and a tilted situation against America's interests for the American economy.

I thank again the distinguished chairman of the Finance Committee who I know is supportive of our efforts. As I said at the outset, the intensity of the crucible of the negotiations that finally appears to be moving this tax extenders bill forward in an unfortunately diminished way, but in the best way we have been able to do it, did not permit this particular amendment to proceed. But it was not for his lack of effort.

I appreciate his courtesy with my persistent lobbying and his support.

I yield the floor.

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